Concerns about cost containment efforts in managed care have stimulated attempts to assess the quality of care delivered under varying financial and administrative arrangements. We propose to examine the quality of care provided to patients treated in three managed care settings located in the Minneapolis/St. Paul area. The organizations we will study include Allina Health Systems, an independent practice association; HealthPartners, Inc. which delivers care through a staff-model HMO and an independent practice association arrangement; and PreferredOne, a preferred-provider organization. Each organization has an established quality improvement program, but differs in its approach to improving quality. The organizations also differ in their reliance on financial and administrative incentives to improve the quality of care they provide. We will evaluate whether four features of managed care organizations - financial arrangements with providers, strategies for the management of care, methods of delivery of care, and the degree of cost-sharing borne by patients - influence the quality of care received by patients with hypertension or diabetes, two highly prevalent conditions for which attempts have been made to define valid indicators of quality of care. Given that two of the features we are interested in - financial arrangements and management of care -may be modified by an intermediary organization that employs a provider, we will also assess whether aspects of these features at the level of the provider influence the quality of care delivered. The study will be undertaken as a collaboration between investigators from the Department of Health Care Policy at Harvard Medical School, the Healthcare Education and Research Foundation of St. Paul Minnesota, and the University of Massachusetts, Boston. We will study 667 patients with hypertension per organization and 667 patients with diabetes per organization (for a total of 4,002 patients). The results of this study will identify financial, delivery, and management features associated with the delivery of high quality care, and thereby, assist policy-makers, plan personnel, and providers in their efforts to improve quality, and consumers and purchasers in their selection of health plans.